FTA Allows India to Hike Tariff if UK Imports Surge

The recently signed free trade agreement (FTA) between India and the UK has safeguard measures, which allow India to temporarily increase tariffs or suspend existing tariff concessions on certain goods if a significant surge in imports from the UK threatens or causes serious injury to local industries, according to the Ministry of Commerce.

- DIPAK MONDAL @ New Delhi

This mechanism is a key component of India's cautious approach to trade liberalization, ensuring that the opening of markets does not unduly harm domestic producers. It provides a safety net against unforeseen import surges that could destabilize sensitive sectors, says an official.

The trigger for invoking these safeguards is defined in the trade agreement – a rise in the absolute quantities of an originating good from the UK, or an increase relative to domestic production, directly resulting from the FTA's tariff concessions, and subsequently causing or threatening serious injury to a domestic industry.

Under these measures, India has the authority to either suspend further duty reductions or even increase duties.